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Jack Wheeler
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Jack Wheeler Real Estate LLC. |
| 23686 Pondview Place |
| Golden, CO 80401 |
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| Direct: 303-717-7147 |
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Office:
303-717-7147 |
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Fax:
303-479-2114 |
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Why Buying a Home is a Good Idea.
The Best Investment
As a general rule, homes tend to appreciate about four or five percent a year on average. That figure will vary from neighborhood to neighborhood, and region to region.
Now, five percent may not seem like much at first. You maybe thinking stocks appreciate faster than that, and you may be right. You might even earn more than five percent with a very safe investment in treasury bills or bonds.
But take a second look...
If you bought a $200,000 house, chances are you did not pay cash for the whole amount. You probably got a mortgage. Let’s suppose you put as much as ten percent down –– that would be an investment of $20,000.
At an annual appreciation rate of 5%, a $200,000 house would increase in value $10,000 during the first year. That means you earned $10,000 with an investment of $20,000. Your annual "return on investment" would be a whopping fifty percent. This makes your rate of return on buying a home higher than most any other investment.
Now, we all know, you are making mortgage payments and paying property taxes, along with a couple of other costs. But remember: the interest on your mortgage and your property taxes are both tax deductible, thus the government is essentially subsidizing your home investment. |
Factors Affecting Your Offer Price
How Property Condition Affects Your Offer
Since you have toured the property you are interested in, you should know how it compares to the general neighborhood. All you have to do is put the home in one of three categories - average, above average, or below average.
When evaluating a home’’s condition, there are a number of things you should consider. Structural condition is most important - items such as walls, ceilings, floors, doors and windows. Then paint, carpets, and floor coverings. Pay special attention to bathrooms and bedrooms and whether the plumbing and electricity work efficiently. Look at the fixtures, such as light switches, doorknobs, and drawer handles. The front and back yards should be in reasonably good shape.
The missing ingredient will be information on the condition of the homes from your comparable sales list. Provided you chose the right agent to represent you, they will have actually visited most of those homes and be able to provide key insights.
How Home Improvements Affect Your Offer Price
Even when comparing exact model matches within a tract of homes, you should note whether the previous owners have made any substantial improvements. Cosmetic changes should be largely ignored, but major improvements should be taken into account. Most important would be room additions, especially bedrooms and bathrooms. Other items, like expensive floor tile or swimming pools should be taken into account, too, but should be discounted. A pool that costs $20,000 to install does not normally add $20,000 in value to the home.
Rely on your agent to give you guidance in this area. |
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When you need Real Estate, you need to know Jack!
Jack Wheeler
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